BP posts record loss of $6.5 billion

UK-based oil and gas giant BP reported on Tuesday a loss of $6.5 billion in 2015, the company’s worst annual loss in over 20 years.

BP also said it expects to reduce the number of staff and contractor roles in the Upstream segment by around 4,000 during 2016 and by up to 3,000 from the Downstream by the end of 2017.

Underlying replacement cost profit (net income) for the full year was $5.9 billion, compared with $12.1 billion reported for 2014, down 51%.

The underlying result for the fourth quarter was $196 million compared with $2.2 billion for the fourth quarter of 2014, BP said in a statement.

BP took $2.6 billion in non-operating post-tax charges in the fourth quarter, primarily related to impairments of upstream assets as well as restructuring charges, the company said.

The lower underlying result was predominantly driven by the impact of steeply lower oil and gas prices on BP’s Upstream segment, which reported a pre-tax loss for the quarter.

The Brent crude oil marker price averaged $44 a barrel in 4Q 2015 compared with $77 a year earlier, and the average Henry Hub US gas marker price was $2.27 per million British thermal units compared with $4.04 in 4Q 2014.

Capital spending

According to BP, organic capital expenditure for 2015 was $18.7 billion.

BP expects annual organic capital expenditure to remain between $17 and $19 billion in 2016 and 2017 and to be at the lower end of that range in 2016.

Senior executive team changes

In a separate statement, BP announced the appointment of Lamar McKay to the new position of Deputy Group Chief Executive.  McKay, currently chief executive of BP’s Upstream segment, will be based in London.

McKay will be succeeded as Upstream chief executive by Bernard Looney, currently chief operating officer, production, in the Upstream segment.

In addition to assuming some duties currently borne by BP’s Group Chief Executive, McKay’s responsibilities will include strategy and long-term planning, safety and operational risk, technology, and corporate governance, BP said in the statement.

These appointments headline a reorganisation of BP’s executive team that includes other adjustments which will follow the retirement of Katrina Landis, executive vice president of corporate business activities, who leaves the company on May 1.

LNG World News Staff